New Delhi: Inflation galloped to a 45-month high of 8.1%, whipped up by costlier edibles and industrial fuel as government measures appeared to have little control on rising prices.
With a hike in retail fuel prices around the corner, Finance Minister P. Chidambaram said the impact of any increase in petrol and diesel prices would be short-lived.
Inflation, measured on wholesale prices, was 8.1% for the week ending 17 May from 7.82% the previous week. The last high, as per provisional figures, was 8.33% in the week ended 28 August, 2004.
Chidambaram told reporters 8.1% inflation was worrisome after releasing GDP growth figures for last fiscal.
Since the 31-March decision of the Cabinet Committee on Prices to slash import duty on edibles oils and ban export of non-basmati rice to contain inflation, government has unveiled numerous measures to tame price rise.
It had also goaded steel and cement manufacturers to cut and hold prices for up to three months. Chidambaram said on 30 May there was still scope for cement makers to cut prices.
Incidentally, cement and steel prices came down by 0.6% each during the week under review. As opposed to the prices of these construction materials, prices of fish marine jumped 6%, fruits and vegetables 3%, moong 2% and spices 1%.
Despite a ban on export of skimmed milk powder, it became costlier by 7%. Also, prices of imported edible oil and khandsari went up by 1%.
In industrial fuel, furnace oil was dearer by 3%, light diesel oil 2% and coke 31%.
He gave an assurance to “do our best to contain... inflation.” But a lot depends on crude prices ruling above $130 a barrel.
Chidambaram said fiscal, monetary and administrative steps taken by the RBI and the Centre have contained inflation. “There are many other countries, which are not able to contain inflation at this level due to one or the other reason,” he added.
The Finance Minister reiterated cement manufacturers have a scope to cut prices, saying new capacities have been added, and “there is no reason why they cannot afford to cut prices”.
Following government intervention, companies have already announced Rs3 to Rs7.5 reduction in a cement bag of 50kg.